China propped up the commodities market at the turn of the millennium and in the aftermath of the global financial crisis, but things feel different now.
Share to twitterMany market participants believe the commodities super-cycle is all but over, yet others opine it is merely taking a break to return with the next cycle led by natural resources of a different sort, needed in the drive towards electrification of human mobility and a low-carbon economy.
Since commodity prices are informed by marginal costs subject to intermittent deflationary or inflationary disruptive forces, this expected maturing of the Chinese economy is troubling. Bundles of aluminum ingots sit stacked in Wuxi, China: Growing trade spat between the U.S. and China has massive implications for the commodities market But China's overall commodity consumption is nothing like it was in the last decade. Beijing is also currently embroiled in a trade spat with U.S. President Donald Trump, involving tariff salvos that have implications well beyond bilateral trade between U.S.-China.suggests China's 2019 GDP growth will be lowered by 0.
The stimulus measures expected in 2019 will still offer significant support to the Chinese economy but will feel different, according Marie Diron, Head of Asia Pacific, Middle East, & Africa Sovereigns at Moody’s.
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